Tenants are likely to be balloted next year on whether they want their council homes transferred to a new company.

An initial round of consultations proved inconclusive among tenants, but unions are strongly opposed to any change.

Members of Warwick District Council's executive are being recommended to go for a formal ballot on setting up a new company to run its 6,000 homes.

That requires a secret ballot of tenants, which will decide the matter, probably in the summer of 2003.

The council is unlikely to be able to keep up with work needed on its homes. Transferring to a new company, which is able to borrow money, could solve the financial problem, as Stratford and Coventry councils have done.

Cllr Alan Boad, housing executive portfolio holder, said: "This is one of the biggest things we have faced as a council in the last few years. If we go for the housing transfer, it will mean putting the case in a neutral way to tenants."

In a consultation which has just ended, opinion was divided between staying with the council or moving to a new group.

Older people were more wary of change than younger tenants.

Jean Hartley, housing services manager, said: "About 10 per cent of tenants came to our open days, which was a good response when this is all in its early days."

Jackie Webb, GMB branch secretary, said: "The national view of the union is to oppose stock transfer since it might be detrimental to staff in the long term. Currently, the view of the GMB members locally is to go along with that national policy."